Dear Quebec: kindly mind your own business

Newfoundlanders are a bunch of whiners. But we’re certainly not the only ones — or even the worst ones.

Quebec’s Pauline Marois truly excels in the art of the whine. As a narrowly elected separatist premier, she has to tread carefully when it comes to internal politics.

But like many premiers — especially Newfoundland ones — she never wastes an opportunity to lash out at Ottawa. And her government’s recent outrage over the non-guaranteed federal loan guarantee for Muskrat Falls was a masterpiece.

This is the province, after all, that has taken billions in subsidies and federal transfers over the decades. One of the biggest winners has been transportation giant Bombardier.

“You have to understand — Bombardier is not really in the aerospace business. It’s in the subsidy business,” Andrew Coyne wrote in a 2008 Maclean’s column.

At that time, Bombardier was being challenged by the World Trade Organization for hundreds of millions in cash infusions from Ottawa, Quebec and even Great Britain.

Of course, Coyne abhors subsidy of any type, including loan guarantees, supply management and equalization.

Ah, yes. Equalization.

Newfoundland fought tooth and nail to hang onto equalization payments even when it no longer qualified. The rationale was that a chronically poor province deserved a chance to catch up even as oil money started to flow. (With an explosion in civil service jobs and lingering debt, it appears that chance has been somewhat squandered over the past decade.)

In total funds, however, Quebec has been the biggest beneficiary of equalization.

As the Toronto Sun reported in August, Canadians have given Quebec about $250 billion in equalization payments since 1957, half of all the money the program has handed out.

“Over that span of more than 50 years, Quebec has always been the biggest beneficiary, and has never been a net contributor to equalization,” the Sun reported.

Meanwhile, the Quebec government did not waste time condemning Friday’s announcement of a federal loan guarantee for Muskrat.

The minister called the move an “encroachment” on Quebec’s jurisdiction, and warned the province may pursue legal avenues to stop it.

Quebec’s opposition to a potential guarantee was known long before Friday’s tirade. And at least one member of the Quebec press seems to think it’s little more than harmless sabre-rattling.

André Pratte of La Presse says the notion that Quebec taxpayers’ dollars are going to the project is misleading, as the agreement only gives Newfoundland lower interest rates on loans.

Pratte understands the situation perfectly.

“There is no ‘unfair competition,’” he writes (loosely translated). “Certainly, Newfoundland and Nova Scotia could deal with Hydro-Québec. However, over the years, negotiations between the two provinces and Quebec have always failed, for one reason or another.

“Through this project, Newfoundlanders want to loosen the grip of Quebec and ensure energy independence; the Marois government is misguided to blame them.”

Pratte also notes Muskrat power will be too costly to compete with Quebec in U.S. markets.

Perhaps the most ironic element in the whole affair is that the loan guarantee involves little to no risk to Canadian taxpayers. Ottawa has imposed so many conditions that its back is fully covered. In the end, it’s only Newfoundland taxpayers who will be saddled with cost overruns or sagging demand.

For Marois, at least, mouthing off about another province’s affairs must be a reprieve from the wave of political scandals and resignations sweeping her own.

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Jack

December 06, 2012 - 07:51

What most Newfoundlanders and Labradorians are not aware is that the Quebec Government and Hydro Quebec are building a new hydroelectric power facility near La Romaine or Unamenshipit, an Innu Community on Quebec's Lower North Shore area as part of their government's ambitious project known as Plan Nord.
For those not familiar with Plan Nord, its the Quebec Government's ambitious plan to turn Northern Quebec into a natural resource superpower. Part of this plan includes building a road to connect all Lower North Shore area communities from Natashquan to Blanc Sablon, build more hydro-electric power facilities, and implementing port and rail links.
With Quebec building more hydro electric power facilities like La Romaine, perhaps now is the time for Marois and the Parti Quebecois to quit complaining when other province implement similar projects like Muskrat Falls or La Romaine.

Usually, Mr. Smith, the people who own the resource are the primary beneficiaries of the development of the resource.That is how it works in other jurisdictions - Quebec, for example. In the case of MF, the 180,000 odd homeowners/households on the Island will subsidize - heavily subsidize - the cost of power sold to the millions of people living in the Maritimes and the New England states, so Canadian and US consumers will benefit. We Island homeowners/householders will also subsidize the cost of power sold to mining companies in Labrador. (Cue the next generation of Newfie jokes.) Labrador residents don't benefit from this project. Their lands will be flooded, rivers polluted and landscape ruined by powerline corridors. They can, I suppose, travel down to the coast to watch their wealth disappear under the strait of Belle Isle, and get their pictures taken by the transformer station. It will make a great keepsake for the grandkids. After all, the grandkids will be paying the multi-billion dollar cost overruns long, long after we're gone.

"However, over the years, negotiations between the two provinces and Quebec have always failed, for one reason or another" paying only one quarter of a cent per kwh that you sell at 2.5 cents per kwh from Churchill seems like a legit enough reason or another. Quebec and its seperatist premiere should shut the hell up....

"Ottawa has imposed so many conditions that its back is fully covered.... it’s only Newfoundland taxpayers who will be saddled with cost overruns or sagging demand." Exactly the problem (except you should have said "and" sagging demand). And paragraph 3 of Schedule "A" of the "Guarantee", GUARANTEES that to be eligible for any loan guarantee that "may" eventually apply, the NL government must pass a law (worded satisfactorily to Ottawa's requirement) that must make it mandatory for island ratepayers to pay rates that will be high enough each and every year to cover every conceivable cost, cost overruns, taxes, etc. associated with Muskrat Falls ---- whether we need/use the power or not ----- hence, if demand is low, or even goes down ---- RATES GO UP. If you view www.vision2041.com you will see that we do not need MORE power, and that we do not even need all of our existing Holyrood capacity ---- no energy/capacity crunch till way past 2041. And greenhouse gas emissions? While Nalcor has in the past raised the fear that a $20 per ton carbon tax would increase the cost of GHGs emitted from Holyrood, the reduction in Holyrood's GHG's (92% of the province's GHGs are unaffected by Muskrat Falls) works out to a cost of more than $6,000 per ton (all paid for by low and middle income ratepayers)-- with the 92% large Industry, private sector emitters ---OFF THE HOOK ---- See vision2041 website.

...but maurice, this is a project for the people of NL to access power for the people of NL?? Who do you think should pay for it? The people of British Columbia? When you need power for the cabin you go to Canadian tire and buy a generator...who do you think should pay for it? The guy who lives down the street? Wake up b'y for God's sake...

Francois Cardinal

December 05, 2012 - 07:19

Canada is there a federal system or a republic? If it is federal, we can't pretend that the constitutional division of responsibilities no longer existed once a province decides he no longer wants his case and that the federal government intervene to help. Natural resources is a provincial responsability.

Quebec is sabre rattling but with an eye as always to get some other gravy from the feds-its sqeak loudly and get grease as usual. But in the end, Quebec has much more to gain from Muskrat than anyone else, NS and NL included. The short term construction, equipment supply and engineering contracts and employment at site. But the biggest thing is that Quebec stands the best chance to be the big benefactor by buying cheap energy from Muskrat and reselling on spot market when the price is right. Quebec routinely profits from trading in cheap electricity. Pratte is incorrect. NL can compete with Quebec. Unfortunately because the people of NL are being forced to pay the unknown subsidy to permit Nalcor to compete.

HBG

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